October E&C customer update
Dear valued E&C customer,
Thank you again for your continued support during a challenging and often frustrating time. We know from our Account Managers how much pressure you have been under operationally.
As in previous months, we hope that this customer update will reassure you that E&C cares deeply about the service disruption our customers have faced and how this adds to your workload. Across our Operations (including Warehousing, Transport and Orders) and Procurement teams (including Demand Planning and Buying), we continue to look for the best solutions to improve our service under the current constraints. We genuinely believe that we have identified and pursued the best solutions available to us; these may have taken longer to research and implement, but we feel confident that they will enable us to stabilise service to you, our customers, more reliably.
As we’ve reported before, supply chain disruption continues with a combination of:
- Shorted deliveries
- Missed delivery slots
- Non-compliant deliveries that our warehouse teams can’t process immediately
We are continually flagging these issues to our hauliers and suppliers, and explaining the enormous knock-on effects this has for our customers and the trade. We hope that our transparency with all concerned parties will push forward improvement. In some instances, by escalating examples of incomplete deliveries, we have discovered that distribution partners sub-contracted by our product suppliers have not been sharing complete or accurate information about their delivery schedules or completed deliveries with the suppliers or with E&C. We are working together with our suppliers to get to the bottom of this and to establish more open lines of communication.
Last month, we explained how we are adding 10 new HGVs to our transport fleet to absorb some of the shock of additional demand. We have also been using these HGVs to collect stock directly from suppliers’ warehousing facilities. Typically, it is the supplier’s responsibility to deliver stock to our warehouse facilities. However, where suppliers have been failing to do this in a timely manner, E&C has decided to share some of this logistics responsibility so that we have more reliable availability and greater control over our goods-in. So far, this has delivered significant improvement in branded stock availability.
Another initiative that will make a significant difference to our stock availability over the coming two weeks is the production schedule at our UK bottling partner. We have been working with Greencroft for a number of years as an energy-efficient and sustainable alternative to shipping bulk wine in bottles. If bottling goes according to schedule, we will have an additional 46,000 cases of wine in our Park Royal depot before the end of October.
Increasing cost of goods
Global supply chain issues are beginning to trickle down into shortages of packaging materials, such as glass, aluminium, cardboard and paper. The far-reaching effects of this are already being seen across all industries, outside hospitality and FMCG. Last week, a significant number of UK based publishers and newspapers reported that the shortage of paper was going to drive up the average cost of printed materials next year by 5-10p per unit. Simultaneously, the UK’s double-glazing installers are reporting double-digit increases in costs of glass for window installation.
As these raw materials are crucial to wines, spirits, beers and the like, all suppliers throughout our portfolio are reporting concerns about increasing costs of goods. A few of these costs have already been passed onto E&C (particularly with new vintages or new listings). So far, E&C has resisted passing on these costs to you, our customers. We are aware that a few of our competitors have already announced blanket price increases across all product categories, effective from 1st November. For the time being, we are doing what we can to mitigate this increased cost of goods. It is likely that there will be some specific product increases owing to poor yields in the wine sector, and specific increases against softs and small pack goods. We will do everything we can to communicate this to you with plenty of advance notice.
Through the combination of a sustained period of high volumes of orders, together with the large quantities of goods-in to the warehouse to replenish our stock levels, our main warehouse in London has come under significant pressure.
We have implemented a number of improvements to the warehouse, allowing this team to work more efficiently. Ultimately, this is helping to reduce the turnaround time between stock being received in our warehouse, and then making it back out to you, our customers. These include:
- Replacing storage racks for improved capacity and safety
- Replacing lighting throughout the warehouse for enhanced visibility and pick accuracy
- Training and licensing multiple new pickers
- Consolidating stock throughout the warehouse that has historically been mispicked and/or replaced in the incorrect storage racks
- Clearing aisles and storage racks closest to the goods-in area of the warehouse, enabling a more streamlined landing process for high-turnover stock
Alternative product suggestions
Supply chain pressures are especially affecting availability of international and deep-sea products. While we are conscious that many of these blue-chip products are the consumer favourites that form the backbone of many drinks lists, we are also in a situation where we have to accept these shortages and look for work-arounds.
With this in mind, our Buying teams have been looking for new products that can function as substitutes in the short- to medium-term. A few of these are below, but do please contact your Account Manager for a list that is more tailored to your range and requirements.
If you have any questions, please don’t hesitate to reach out to your E&C Account Manager, or our Customer Service team.
We wish you every success as the industry prepares for its peak trading period.
Sam and Ants